Heading off side of fiscal mountain

By

Published: Tuesday, November 13, 2012 at 11:47 AM.

The election is over. Now let all Americans come together and peer into the fiscal abyss.

President Barack Obama and GOP leaders of the House of Representatives need to get down to serious business and soon. Barring a bipartisan deal of some kind on taxes and spending, the country goes over the so-called fiscal cliff on Jan. 1, 2013.

According to an analysis from the Tax Policy Center, U.S. households will be hit with an average tax increase of $3,500 if Congress and the president don’t reach an agreement on reducing the federal deficit. Close to 90 percent of households will pay higher taxes next year, the analysts said.

According to the Congressional Budget Office this would likely throw the country back into a recession, with rising unemployment.

The so-called sequestration would also take a huge chunk from the Defense Department’s budget — a scheduled $52 billion in fiscal 2013. The impact on bases such as Camp Lejeune, especially civilian employment, could be severe if nothing is done to prevent this scenario.

None of this good — but that was the point of sequestration, to more or less force warring Democrats and Republicans to come to terms on reducing the massive federal budget deficit and the mind-boggling $16 trillion national debt.

Obama and House Speaker John Boehner, the leader of Republicans on Capitol Hill, don’t have much time to agree on a grand bargain to raise revenue and cut spending.

The election is over. Now let all Americans come together and peer into the fiscal abyss.

President Barack Obama and GOP leaders of the House of Representatives need to get down to serious business and soon. Barring a bipartisan deal of some kind on taxes and spending, the country goes over the so-called fiscal cliff on Jan. 1, 2013.

According to an analysis from the Tax Policy Center, U.S. households will be hit with an average tax increase of $3,500 if Congress and the president don’t reach an agreement on reducing the federal deficit. Close to 90 percent of households will pay higher taxes next year, the analysts said.

According to the Congressional Budget Office this would likely throw the country back into a recession, with rising unemployment.

The so-called sequestration would also take a huge chunk from the Defense Department’s budget — a scheduled $52 billion in fiscal 2013. The impact on bases such as Camp Lejeune, especially civilian employment, could be severe if nothing is done to prevent this scenario.

None of this good — but that was the point of sequestration, to more or less force warring Democrats and Republicans to come to terms on reducing the massive federal budget deficit and the mind-boggling $16 trillion national debt.

Obama and House Speaker John Boehner, the leader of Republicans on Capitol Hill, don’t have much time to agree on a grand bargain to raise revenue and cut spending.

With a lame-duck Congress and limited time, it’s unlikely Obama and Boehner will be able to work out a sweeping agreement that puts the nation on a sustainable, long-term fiscal course. The most realistic option may be a short-term measure that helps advance the long and difficult process of ending deficit spending.

Neither side is in a position to dictate the terms of a deficit reduction agreement. The president as well as the GOP leaders will have to make concessions. Obama and Boehner could agree just to push the reckoning into 2013. The goal of any deal should be to reduce the deficit without further harming the economy. The future of the nation depends on the ability of Democrats and Republicans to whittle down our mountain of debt; but no one wants a so-called bargain that slows already weak growth.

Obama faces a different challenge. His party doesn’t control both houses of Congress, so he can’t expect to ram tax hikes through and leave spending largely untouched. He should be prepared to do what’s necessary to control the massive growth of Medicare and Social Security. There are no other viable options for keeping the nation solvent.

It shouldn’t be that difficult for the president and the speaker to keep us from going over the fiscal cliff. The hard part is reaching a grand, long-term deal that fixes entitlements. If that isn’t done, the consequence will be national fiscal suicide.